Interim award on admitted liability upheld where tribunal relied on admissions, rejected equitable set-off, and treated acknowledgment as arresting limitation.

An interim award under section 17 of the Arbitration and Conciliation Act, 1996 was treated as valid where the tribunal recorded reasons, relied on correspondence and revenue statements, and found clear admissions of liability; it was not a mere default order. The plea of equitable set-off failed because the cross-demands arose from different transactions and parties, and therefore fell outside the settled scope of equitable set-off. Pending inspection did not bar relief on the admitted claim, as it related only to an unproven counterclaim. The limitation objection also failed because the correspondence amounted to acknowledgment of liability.

---

---

Issues: (i) whether the interim award was unsustainable for want of reasons or for being merely a default order under section 17 of the Arbitration and Conciliation Act, 1996; (ii) whether the plea of equitable set-off, pending inspection, or limitation could defeat the claim to an interim award on admitted liability.

Issue (i): whether the interim award was unsustainable for want of reasons or for being merely a default order under section 17 of the Arbitration and Conciliation Act, 1996

Analysis: The Tribunal had heard the parties, identified the material on record, recorded the admissions in the correspondence and revenue statements, and gave reasons for concluding that the amount claimed by the respondent stood admitted. The order was not founded merely on non-compliance with an interlocutory direction; it proceeded on the finding that the appellant had made decisive admissions and that the respondent's claim could be granted to the extent of the admitted liability.

Conclusion: The interim award was held to be a reasoned adjudication based on admissions and was not invalid for want of reasons or for being a mere default order.

Issue (ii): whether the plea of equitable set-off, pending inspection, or limitation could defeat the claim to an interim award on admitted liability

Analysis: The cross-demands did not arise from the same transaction, as they related to different series, different bid arrangements, and different contracting parties. The claimed set-off was therefore outside the settled scope of equitable set-off. The pending inspection related only to the counterclaim, which still required proof, and did not prevent relief on the admitted claim. The correspondence dated 16 May 2009 amounted to acknowledgment of liability, and the limitation objection was neither substantiated nor available to defeat the admitted claim.

Conclusion: The pleas of equitable set-off, pending inspection, and limitation were rejected.

Final Conclusion: The admitted liability in favour of the respondent was upheld and the challenge to the interim award failed.

Ratio Decidendi: An interim award may be sustained on the basis of clear judicial admissions, and a claim for equitable set-off cannot defeat admitted liability unless the cross-demands arise from the same transaction or are so connected as to form one transaction; acknowledgment of liability may also arrest limitation.

---